The European Union has delayed its $290-million financial assistance for Belarus, the International Monetary Fund (IMF) said in the third review under its Stand-by Arrangement with Belarus, which was released on February 1.
Belarus was originally expected to receive the financial assistance in the fourth quarter of 2009. The IMF said that "there have been delays in processing the loan, and due to changes in procedure following the ratification of the Lisbon Treaty, it is increasingly likely that the disbursement will only take place during the first quarter of 2010."
The reason for the delay is the EU's decision that all requests for macrofinancial assistance must be considered by the new European Commission, which is expected to take office on February 9. If approved by the European Commission, the loan request will then have to be approved by the European Parliament.
According to the IMF, the Belarusian authorities have already declared their readiness to "implement measures that would reduce external financing needs by about $300 million over the full year of 2010." The measures may include budget spending cuts and a reduction in state lending to the economy.
The IMF said that "the contingency measures," if necessary, would be discussed during a February 3-16 visit of the Fund's mission to Belarus for the fourth review of the arrangement. "Implementation of such measures would ensure that program objectives continue to be met, although the quantitative targets for end-March 2010 may need to be modified since it would take some time for these measures to take effect," the report said.
The IMF noted that the Belarusian authorities "are also continuing to search for alternative sources of finance to offset any shortfall in EU financing and reduce the need for contingency measures."
Pyotr Prakapovich, chairman of the National Bank of Belarus, said in late January that Minsk needs additional external financing because Russian crude oil supplied to the country is going to be subject to higher-than-expected export duty.